Indian crypto exchange loses $3.5 million bitcoin, promises to reimburse victims

Posted: 13 April 2018 1:54 pm
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The exchange said that the stolen funds have been “siphoned” to an address outside of their control.

Indian cryptocurrency exchange Coinsecure has reported an incident where hundreds of bitcoins have been removed from the company’s digital wallet, alleging potential misconduct by the organization’s chief strategist.

In a release posted to the exchange’s website, 438 bitcoin, currently valued at around US$3.5 million as of press time, was lost during an exercise to extract Bitcoin Gold (BTG) to distribute to customers.

“Our system itself has never been compromised or hacked,” Team Coinsecure said.

“Our CSO, Dr. Amitabh Saxena, was extracting BTG and he claims that funds have been lost in the process during the extraction of private keys.”

The exchange said that the stolen funds have been “siphoned” to an address outside of their control. A First Information Report (FIR) has been lodged with local cyber authorities and investigators are examining the case.

“We are working round the clock to restore services and to try and recover all of the lost funds… Irrespective of funds being recovered, we re-assure all our customers that you will be indemnified from our personal funds.”

Coinsecure promises to restore all lost funds to customers

Coinsecure declared that since the private keys were kept by Saxena, the company felt that he has created a “false story” to divert attention and that he may have “a role to play” given his unconvincing explanation.

Saxena has an Indian passport and Coinsecure suggest that it be seized as he may “fly out of the country soon”.

India’s central bank outlawed the use of cryptocurrencies among regulated entities earlier this month. Companies that provide crypto-related services have three months to wind up these now-illicit practices.

Although the RBI has decided to ban the use of unregulated cryptocurrencies, the central bank has been exploring the idea of introducing its own fiat digital currency, with an official progress report due in June 2018.

In February, India’s prime minister Narendra Modi asserted that disruptive technologies, such as blockchain and the Internet of Things (IoT), are developments that require “rapid adaptation” in the workplace. During a recent speech, Modi pointed out that technology is breaking down geographical limits and roadblocks.

“Technology will help us create a seamlessly integrated world. A world where geographic distance no longer remains a barrier in cultivating a better future,” Modi said. “Leveraging technology in such a holistic manner was unthinkable some years ago. We have successfully completed this life-cycle in the last three and a half years. This has been possible through a change in public behavior and processes.”

The National Association of Software and Services Companies (NASSCOM), India’s leading IT trade association, announced a platform for skills development in eight varied technologies, including blockchain, at WCIT 2018.

NASSCOM held a blockchain masterclass in December 2017, designed to provide an introduction to the technology, its history and potential. In February, the association will host India’s first Blockchain Bootcamp.

You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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